Automotive suppliers not so keen on watering down fuel economy rules

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It’s pretty clear where the major automakers stand on federal emissions and fuel economy standards. Barely two days after his election, the Alliance of Automobile Manufacturers sent a letter to Trump urging him to “reform” federal fuel economy, emissions and safety regulations. Last week, executives of 18 automakers sent a second letter reiterating the request for EPA emissions standards to be loosened.

However, at a recent meeting hosted by the Detroit Economic Club (as reported by Detroit News via Green Car Reports), the heads of three major auto suppliers called instead for clarity and stability, which have been in short supply since the new administration took power.

Companies may view regulations as burdensome, but they also value predictability, especially in the auto industry, which regularly makes capital investments in the hundreds of millions of dollars, and measures product cycles in decades.

In today’s globalized auto industry, firms must also consider the policies of other countries. China and the EU seem likely to continue their stricter efficiency standards, regardless of what the US government does.

Matt Simoncini, CEO of Lear, said the absence of details on everything from the president’s border policies to the definition of “imports” leaves companies unable to plan and focus resources. “What we need is clarity of policy and time to react,” he said. “What we have right now is a bunch of vague comments, vague policies, a tax program where we’re not really sure how it’s going to impact us.”

James Verrier, CEO of Borg Warner, said he doesn’t want Trump to reverse the progress made on the Corporate Average Fuel Economy (CAFE) standards. “Do not slow down the pace on CAFE standards,” said Verrier. “We’ve come a long way as an industry and we need to keep going forward. Don’t go backwards and don’t slow down.”

 

Source: Detroit News via Green Car Reports